@Hariharan,
I recommend you take a look at the "Working with OpenERP" book, or refer to the other free resource: http://openerpbook.com/. I've used the kindle book to learn some of the basics and it is very useful for understanding answers to the basic functionality of Odoo.

@Luke I am assuming you're suggesting this book because you know it has the answer to this question. Surely that means you also know the answer to the question, and could answer it? Odoo is changing too fast for books to hold the definitive guides. We need to create online resources, not rely on media with longer turnovers than a significant Odoo release.

Make order : is the way to tell the system to do cross docking. That means maker order allows you to not get stock of products. When customer ask 5PCE, odoo don't take them from stock but run purchase order to buy and bring them for deliver customer;

Manufacture : every company have two main ways to procure himself in product : buy with supplyers or product(manufacture) it himself.

you can manufacture products by maker order option. That mean you run manufacturing order only if customer confirms sale order.

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